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3. The elements of CVP analysis include the following, except a. total fixed costs. b. unit variable cost. c. volume or number of units. d. relevant costs.

3. The elements of CVP analysis include the following, except a. total fixed costs. b. unit variable cost. c. volume or number of units. d. relevant costs.

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 14MC: Which of the following statements is true regarding average fixed costs? A. Average fixed costs per...
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3. The elements of CVP analysis include the following, except a. total fixed costs. b. unit variable cost. c. volume or number of units. d. relevant costs. 4. Which of the following statements is correct? a. Gross margin and contribution margin are the same. b. Contribution margin is the excess of sales over variable costs, and this is the amount available for the recovery of fixed assets and generation of profit. c. One inherent, simplifying assumption in CVP analysis is that production equals sales. d. Unit variable costs change directly with the cost driver or activity level. 5. In CVP analysis, it is assumed that a. all costs are classifiable as either direct or indirect costs. b. cost and revenue relationships are predictable and linear over any range of activity. c. selling prices per unit and market conditions remain unchanged. d. total fixed costs are constant over the relevant range, but fixed costs per unit vary directly with the cost driver or volume. 6. Management may use CVP analysis to determine the relative profitability of a product by a. determining the unit contribution margin and the projected profits at various levels of production. b. controlling the physical production of the products. c. assigning costs to a product in such a way that the contribution margin is maximized. d. keeping all costs to an absolute minimum. 7. Cost-volume-profit relationships that are curvilinear may be analyzed linearly by considering only a. a relevant range of activity. b. the variable costs. c. the fixed costs. d. the relevant costs.
Transcribed Image Text:3. The elements of CVP analysis include the following, except a. total fixed costs. b. unit variable cost. c. volume or number of units. d. relevant costs. 4. Which of the following statements is correct? a. Gross margin and contribution margin are the same. b. Contribution margin is the excess of sales over variable costs, and this is the amount available for the recovery of fixed assets and generation of profit. c. One inherent, simplifying assumption in CVP analysis is that production equals sales. d. Unit variable costs change directly with the cost driver or activity level. 5. In CVP analysis, it is assumed that a. all costs are classifiable as either direct or indirect costs. b. cost and revenue relationships are predictable and linear over any range of activity. c. selling prices per unit and market conditions remain unchanged. d. total fixed costs are constant over the relevant range, but fixed costs per unit vary directly with the cost driver or volume. 6. Management may use CVP analysis to determine the relative profitability of a product by a. determining the unit contribution margin and the projected profits at various levels of production. b. controlling the physical production of the products. c. assigning costs to a product in such a way that the contribution margin is maximized. d. keeping all costs to an absolute minimum. 7. Cost-volume-profit relationships that are curvilinear may be analyzed linearly by considering only a. a relevant range of activity. b. the variable costs. c. the fixed costs. d. the relevant costs.
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